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Baroness Hollis of Heigham: I am grateful to the noble Earl for giving way. He is making a speech which centres essentially around carers as we more conventionally understand them in terms of recipients of ICA. But, of course, his amendment, which concerns HRP, obviously involves essentially the carers of children--that is, parents. Do I understand that the noble Earl is concerned only with ICA recipients as opposed to other kinds of carers? I should tell him that my response is predicated on the second of those.

Earl Russell: I thank the Minister for that contribution. The arguments have some point in common. It is not only the old who need to be cared for; the need to care for those who need it is one which must fall somewhere.

Those who are undertaking it cannot, at one and the same time, be in the labour market. So if they are out of the labour market because they are doing something else which is necessarily in the public interest, which someone else would probably have to be paid to do, possibly out of public funds if they did not do it, a case for the exemption from the contribution conditions is quite a strong one. I beg to move.

Baroness Pitkeathley: Far be it from me to disagree with the noble Earl, particularly in view of his most gracious apology about a previous Bill, but a great

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many carers do combine paid work with caring. It is one of the main features of the National Carers Strategy to enable those carers better to do so.

Earl Russell: I appreciate that "superwoman" exists, but not every woman can rise to it.

Baroness Hollis of Heigham: Perhaps I may add to my noble friend's contribution. Seventy-five per cent of all married women work and more than 60 per cent of married women with children work.

As we have heard, this amendment relates to the contribution conditions for incapacity benefit. There are two contribution conditions for entitlement to IB. Currently the first condition requires a person to have actually paid a certain amount of contributions in any one tax year. But from April 2001, provisions in the Welfare Reform and Pensions Act will require contributions to have actually been paid in one of the past three income tax years rather than in any tax year. We believe that that is reasonable. The purpose of IB is to provide a replacement income for people who previously had earnings from work and have become incapable of work due to illness.

The way this contribution condition works at present means that a person who has had no contact with the labour market for many years would still qualify for IB as long as they had paid the minimum amount of contributions in just one year. We do not think it right for that to continue, which is why the Government pursued the matter last summer.

The second contribution condition for IB requires contributions or credits equivalent to 50 times the lower earnings limit in both the past two tax years. That condition is unchanged. People will continue to be able to satisfy the condition by credits alone.

The amendment before us would represent a significant departure from the current arrangements. It would allow tax years during which people are unable to work because of caring responsibilities at home to count towards satisfying the contribution conditions for IB. As drafted, the amendment refers to the first contribution condition. People unable to work because of caring responsibilities at home would be deemed to have satisfied the first contribution condition regardless of whether they have ever paid any contributions at all. We believe that it is reasonable to expect people who have been in a position to work to have made at least a modest contribution in order to get a contributory benefit.

We do recognise that some people who have not had an opportunity to pay contributions should be able to qualify for IB. We are protecting the position of carers who have not paid contributions in the past three years. Carers include those caring for children with severe disabilities--children who attract either the higher or the middle rate DLA component. They can use credits to qualify for IB provided they have paid contributions at some point. From April 2001 we are making special provision to allow entitlement to IB for disabled young people who have never had an opportunity to pay contributions; in other words,

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those who in the past would have gone on to severe disablement allowance. But people who have responsibilities at home have not necessarily been prevented, other than by their own choice, from working to a greater extent and paying contributions. After all, we are talking about a contributory benefit. Such people would not qualify at present and extending IB to them, regardless of their circumstances, would therefore represent a significant breach of the contributory principle.

The Government fully support the wishes of those, for example, who want to remain at home and care for their children when they are very young. But it does not follow that if people choose to stay at home to look after their children rather than combine looking after their children with a part-time job they should have access to a contributory benefit which is intended as an earnings replacement for people who have been in work and would still be in work were it not for their illness.

After all, many people do combine childcare responsibilities with work and do earn enough to qualify for IB. The minimum amount of contributions required equates to earnings of just £1,650 in a period of 25 weeks or less. The benefit is not therefore confined to those who are in well-paid jobs. The minimum wage will bring many more part-time workers, in particular women, above the earnings threshold for benefits--the lower earnings limit--which is around 18 hours a week at the minimum wage. I think that the essential point raised by the amendment is how far should the benefits system provide earnings replacement benefit for those who have not been in recent employment, who have not paid contributions and who have made other choices.

I hope that, on the basis of what I have said, the Committee will agree that our contribution conditions for IB strike the right balance and that the noble Earl will withdraw his amendment.

Earl Russell: I suppose that I should have guessed that nothing on earth is more difficult than to argue against the Department of Social Security's filing system. One can argue against natural justice, common sense and useful effects, but one cannot argue against a ministry's system of classification. It seems to be written in tablets of stone, although I am inclined to think that that would be understating the case.

When the Minister invokes a point of principle, she should perhaps think twice about the actual effects of such a point of principle. If the effects of a principle are not good, one should go back and wonder whether that principle is correctly defined. However, I do not think that we shall be able to get very far with that tonight. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 66 agreed to.

Schedule 6 agreed to.

Clause 67 agreed to.

[Amendment No. 184 not moved.]

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Schedule 7 agreed to.

Clauses 68 to 70 agreed to.

Earl Russell moved Amendment No. 185:

    After Clause 70, insert the following new clause--


(" . Regulations 3, 4 and 5 of the Housing Benefit (General) Amendment Regulations 1996 (the "amending regulations") are hereby revoked, and in consequence thereof Regulations 10, 11 and 12A of the Housing Benefit (General) Regulations 1987 shall have effect as if the amendments contained in the amending regulations had not been made.").

The noble Earl said: I move this amendment with the support of the LGA, the ALG, the Child Poverty Action Group, Mencap, Centrepoint, NCH Action for Children, Barnardo's, Crisis, CHAS, the Churches National Housing Coalition, the National Homeless Alliance, the National Rent Deposit Forum, the Chartered Institute of Housing, and the Children's Society. That is not a negligible list. It represents the collective wisdom of most of those who work in the field.

The effect of this amendment would be to abolish the single room rent restriction for housing benefit for those under the age of 25. That provision restricts young people to housing benefit at a level which is supposed to be appropriate for the rent of a single room in a given area. However, I include the word "supposed" advisedly, because the level of support is very rarely sufficient.

The provision was introduced in 1996. The Minister and I both said that it would be a disaster. When one makes such a statement, one always watches to see whether it was in fact true. In this case I think that we were optimistic. The effect has been even worse than both of us then supposed. The policy rested on a fundamental misapprehension of the nature of the housing market.

I think that I am correct in saying that the intention behind the policy was, first, to encourage people to shop around and to trade down to property perhaps more appropriate to their income. It was felt that housing benefit was sustaining an artificially high level of rents. Secondly, it was hoped that, in some cases, it would induce landlords to reduce the level of their rents. Thirdly, it was hoped that it might lower the level of market rents overall. It has done none of those things.

A large body of research has been done on this subject, a certain amount of which I have in front of me. However, I need rely only on the research done jointly by the DETR and the DSS. That seems very clear in its findings. Tenants who considered this possibility found that it was not an option, because there was simply nothing cheaper to be found in their immediate area. I know that the Minister will not dispute this so I do not think I need bother with finding the page.

The research concluded, perfectly correctly in my opinion, in line with all other research on the subject that the system would not work unless there were rents

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available in the area that were within the limit of the single room rent. In most of the areas studied--now a considerable number--that is simply not the case. Whether that is inherent in the principle of the thing, or whether it is simply that those who are working with the Treasury necessarily fix the rents which they allow too low, I should not care to say. But since, if it is the second, I do not expect it to change, I doubt whether the point is material.

In only 13 per cent of cases cited in the DETR research were people able to negotiate any reduction of rent with their landlord. Of the remainder, 96 per cent were left to pay a shortfall in rent themselves. The shortfalls were substantial: in a few cases they could even be up to £50 a week. Twenty per cent of those people met costs out of borrowing; 81 per cent met them out of benefits. The Minister will have noticed that there is a small overlap in the figures. I do not think it ought to cause any surprise; it is not particularly mysterious. Twenty per cent of those involved in the survey were found to owe debts of over £500. On income support or JSA, debts of over £500 are pretty considerable. We need to know a good deal more about the level of debt on benefit than we do at present.

The provision has been no more popular with landlords than it has been with tenants. The extent of agreement on the single room rent between the landlord interest and the tenant interest is one of the most striking things about it. On the whole, landlords do not reduce rents. In the northern city surveyed in the DETR research, 33 per cent had stopped letting to single people under 25. In the inner London borough surveyed, 25 per cent had stopped doing so. Those are pretty considerable figures in a market where supply was already not on the plentiful side.

A great many more have moved out of the housing benefit market altogether, and a certain number have even moved out of the private rented market altogether and have sold the property. That was particularly clear in the Centrepoint survey of the single room rent in Devon. But since I failed to lay my hands on that around midnight last night, I shall not quote figures from it. The Minister and I have been over this course before. She knows about it as well as I do. So we are seeing a diminution in supply in a market where supply was already particularly thin.

When this matter was debated in another place, we were encouraged to hope for something from the Green Paper. The words of the Green Paper are not strong enough to be described as weasel words--"mice" might be more appropriate. With the leave of the Committee, I should like to read a fair part of what the Green Paper has to say on the subject. It is not very much. It states:

    "A stable home provides a secure foundation from which to find work, and Housing Benefit should help provide this environment. A number of commentators believe that the Single Room Rent restriction ... is making it difficult for young single people to access and maintain accommodation. For example, critics say that landlords are refusing to rent to under 25s".

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One wonders whether "a number of commentators" should read "all commentators". If there is a commentator who says anything else I should be very interested to hear from him or her. The nearest one gets to a suggestion is in the next paragraph. Whether these words even amount to a suggestion is perhaps grammatically open-minded:

    "One option to consider is to broaden the definition of the Single Room Rent so that a range of rents for shared accommodation is used (e.g. shared houses, flats and bedsits) instead of the current restrictive one room non-self contained accommodation definition".

I suppose that that might be a little better than nothing. It is true that it would deal with one of the big points made at the time, which was that there was simply not enough accommodation for single people under 25. But the whole proposal was based on an entire misapprehension of the nature of the housing market, which is why it did not work. It was believed that it was a demand-led market in which housing benefit pushed up the level of rents. First, that grossly underestimated the shortage of private rented accommodation, especially at the cheap end of the market. The private rented sector has been in decline since 1919. We cannot afford to let it go much further. There are some needs, especially those involving considerable mobility, which cannot satisfactorily be met in any way.

Secondly, I believe that landlords' costs were grossly underestimated. Private landlords, as distinct from registered social landlords, are not charities; they are not in business for purely philanthropic motives. Therefore, if we require them to take a rent on which they do not make a profit there is no good reason why they should stay in business, and a great many of them do not.

Thirdly, I believe that the policy grossly underestimated the amount of profit that landlords could make out of selling their property and investing the capital in equities. In the present state of the housing market that point is even truer than it was before. After all, if a landlord can double his income simply by selling his property, doing no work and investing the money, why should he go on with the troublesome business of repairing and maintaining it and dealing with disputes between tenants when he can make a great deal more money by doing nothing at all? One cannot expect private business to be simply a philanthropy. Therefore, the policy failed because it was fundamentally misconceived.

By now it is clear that we cannot expect people to go on meeting large amounts of rent out of their income support or JSA. That will be even truer if the kind of conditionality of which the Minister spoke earlier becomes a normal part of the payment of benefits. It means that people who are caught by that conditionality will be instantly evicted. That will mean either a very large disorderly crowd on the streets or a considerable addition to public expenditure. I simply do not see how people can be kept in good health while they pay their rent with large chunks of income support. If housing benefit does not meet the full rent we are in very great trouble. The Minister said in

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relation to the 1997 Bill--I welcomed her comment--that she still accepted the principle of the 1986 Act that income support should not be used to meet rent. I hope that the noble Baroness can tell the Committee that in the course of the Government's review of housing benefit that principle will continue to hold. If not, we shall all be in very deep trouble. That includes private sector landlords as well as the rest of us. There is not much of the private sector left. We cannot afford to play fast and loose with what there is. If we lose it, replacements will cost us all a great deal more. I beg to move.

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